Floki Inu DAO Approves Plans to Burn Tokens Worth More Than $100 Million

According to programmers, the proposal was adopted by a 99.97% majority in support of flaming the bridge tokens and 0.03% against it. The 4.2 trillion tokens will be irrevocably burned at 8 PM UTC on February 9, 2023, and the FLOKI transaction tax will be reduced to 0.3% as at 8 PM UTC on February 3. According to data from CoinGecko as of Monday, the planned token burn is valued more over $100 million.

As long as the degree of demand stays the same, destroying tokens is a method of lowering the supply, which ultimately increases the worth of each token. As a result, the Floki Inu proposal listed security threats related to bridges as an additional justification. As CoinDesk has reported, nearly $2 billion was lost or stolen using cross-chain bridges just last year.

“More exploits and data have emerged to show how much of a threat cross-chain bridges could pose, especially if they hold a significant amount of a tokens supply,” the proposal mentioned.

Developers included the currently-assessed idea:

“In Floki‘s case, an exploit on our main cross-chain bridge would have a catastrophic impact on the project since this bridge currently holds 55.7% of what FLOKI’s total circulating supply should be. This is a lot of tokens, and that‘s more than enough to drain the project’s liquidity pools and essentially destroy the project if exploited,”

Shiba Inu dog breed-themed project's founders earlier told CoinDesk that the decision was a component of a larger plan to establish Floki Inu as a significant decentralized finance (DeFi) initiative. In the last few months, the group has worked on current projects including Floki Locker and the metaverse game Valhalla.

The Floki bridge

With a 10 trillion token supply initially on Ethereum, Floki subsequently moved to the quicker and less expensive BNB Chain in 2021 in response to the community's requests.

A contract extension with a total quantity of 10 trillion tokens had to be put into operation by the team on the BNB Chain. But in order to prevent the FLOKI's total circulating quantity from always going above an available quantity of 10 trillion tokens and to enable users to move their FLOKI from Ethereum to BNB Chain and vice versa, this needed a cross-chain bridge.

At that time, the company funded the bridge with 600 billion tokens from its treasury on Ethereum and BNB Chain.

Ever since, the majority of owners have moved their FLOKI tokens off of Ethereum and locked them on BNB Chain. The lack of a bridge still wouldn't endanger the sustainability of the enterprise, developers claimed in the proposal, even though the bulk of the supplies is remained on the Ethereum chain.

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

iOS: t.ly/UUCj

Android: t.ly/cfYt